EXHIBIT 10.16
BUSINESS CONSULTING AGREEMENT
THIS BUSINESS CONSULTING AGREEMENT ("Agreement") is made and entered into this
21st day of August, 2002, by and between, Material Technologies, Inc, d/b/a
Matech, Inc., a California corporation, with its principal place of business at
00000 Xxx Xxxxxxx Xxxx., Xxxxx 000, Xxx Xxxxxxx, XX 00000 ("Company"), and
Circle Group Internet, Inc., an Illinois corporation with its principal place of
business at 0000 Xxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000 ("Consultant").
RECITALS
A. The Company is engaged in research and development, and the business
of detecting cracks and fatigue in metal structural components.
B. The Consultant provides business-to-business consulting services
which assist companies in many aspects of their business, including business
plan development, Internet marketing strategy development, web site design,
technology support, management consulting, corporate communications, sales
training and strategic networking.
C. The Company desires to avail itself of the Consultant's experience,
skills and abilities, and background and knowledge, and engages the Consultant
upon the terms and conditions set forth in this Agreement
D. The Consultant agrees to be engaged and retained by the Company upon
said terms and conditions.
E. The parties hereto have each established a valuable reputation and
goodwill in their respective businesses.
F. Each contractual party, by virtue of its relationship with the other
party, will become familiar with and possessed with the manner, methods and
other confidential information pertaining to the other party's business
activities.
NOW, THEREFORE, in consideration of the recitals, promises and conditions in
this Agreement, the Consultant and the Company agree as follows:
1. Consulting Services.
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(a) During the term of this Agreement, the Consultant shall provide
consulting services to the Company. These consulting services shall be
reasonably requested by the Company, and shall be performed by the Consultant on
such schedule as is reasonably determined by the Consultant, giving due
consideration to the reasonable requirements of the Company. Unless otherwise
mutually agreed, the Consultant shall perform all consulting services at its
principal place of business or other offices. The Consultant's contractual
services may be performed by any one of the Consultant's employees or
consultants , who is reasonably qualified to perform such services. The
consulting services rendered by the Consultant to the Company shall include, but
not limited to:
i. Marketing materials creation and development;
ii. Corporate communications, including investor relations and public
relations campaigns;
iii. Strategic networking to assist the Company in linking its name and
staff with beneficial contacts; and
iv. Strategy and planning consulting to assist the Company in identifying
and analyzing market opportunities, as well as anticipating competitive
behavior.
(b) The Consultant shall collaborate with the Company while designing the
content and marketing terms to be used on the Company's web site to effectively
market the Company. These content and marketing terms shall include, but are not
limited to, creating effective and attention-getting descriptive phrases
highlighting the Company, which shall increase the effectiveness of search
engine registration and keyword computation. The Consultant shall also expose
the Company to other proprietary methods to increase site rank and increase
exposure to newsgroups on various news-wire services. The Company shall have
the right to approve each aspect of the design, content and marketing methods of
the Company's web site prior to its publication.
2. Duration. The term of this Agreement shall be for a period of twelve
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(12) months commencing on the execution date of this Agreement and ending on
August20, 2003.
3. Termination.
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(a) Parties' Termination Right. This Agreement is subject to termination at
any time, by either party, with 30 (thirty) days written notice.
4. Compensation. As compensation for its contractual consulting services,
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Consultant shall receive the following:
(A) $5,000 initial fee, a $5,000 fee per month for the first two (2) months
of the agreement and a $2,500 fee for the remaining 10 consecutive months of the
agreement starting August 21, 2002 through August 21, 2003. Said fees will be
accrued and funded from any funding received by the Company from an introduced
party of the Consultant.
(B) 20,000 warrants per month for each month this agreement is in effect, at
a warrant strike price equal to the closing price of MTEY on the last trading
day of each month in which this consulting agreement remains in effect. Said
warrants shall expire 3 years from issuance. The aforementioned warrants are
subject to full "piggyback" and demand registration rights, as detailed in
Registration Rights Agreement. The 240,000 warrants represent the maximum
amount and only warrants issued to Consultant under this Agreement.
5. Registration Rights. See Registration Rights Agreement.
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6. Ownership of Work Product. All copyrights, patents, trade secrets, or
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other intellectual property rights associated with any ideas, concepts,
techniques, inventions, processes, or works of authorship developed or created
by Consultant or its personnel during the course of performing Company's work
shall belong exclusively to the Company and shall, to the extent possible, be
considered work made for hire. Consultant automatically assigns, and shall
cause its personnel automatically to assign, at the time of the creation of the
work product, without any requirement of further consideration, any right,
title, or interest it or they may have in such work product, including any
copyrights or other intellectual property rights pertaining thereto.
7. Entire Agreement. This Agreement sets forth the entire understanding of
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the parties relating to the Agreement's subject matter and supersedes any prior
communications, under-standings and agreements between the parties. This
Agreement may not be terminated or modified, nor can any of its provisions be
waived, except by written agreement signed by both contractual parties.
8. Facsimile Copies. A facsimile copy of a signed original of this
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Agreement shall be sufficient to bind the parties.
9. Enforceability. If any portion of this Agreement is deemed to be void
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for any reason, then that portion shall be severed. The remaining provisions of
this Agreement, shall not be nullified, but shall be regarded as valid and
enforceable to the fullest extent permitted under Illinois law.
10. Cooperation. Both parties shall cooperate fully with each other in the
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performance of their respective obligations under this Agreement including,
without limitation, providing all necessary information, executing all documents
and performing all actions reasonably required in connection with such
performance.
11. Independent Contractor. This Agreement shall not constitute an
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employer-employee relationship. Pursuant to the parties' intention, the
Consultant shall at all times serve as an independent contractor of the Company.
Therefore, unless otherwise authorized, the Consultant shall not have any
authority to act as the agent of the Company and shall not have the authority
to, and shall not, bind the Company to any agreements or obligations with a
third party. Subject to the express contractual provisions, the manner and
means utilized by the Consultant in the performance of its contractual services
shall be under the sole control of the Consultant.
12. Confidentiality. In the absence of the disclosing party's prior written
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consent, the receiving party shall in no manner disclose the existence or the
content of any information to any third party regardless if the information was
disclosed to the receiving party orally, in writing, or by any other means in
conjunction with the provided services ("Confidential Information"). The
Consultant may disclose the information to its employees, but only to the extent
necessary to carry out the purpose of the Agreement. Each party further warrants
and agrees to use its best efforts to prevent the disclosure of any information
by its employees, as well as any of its agents, successors, heirs and assigns to
whom such information is disclosed, including by obtaining a written agreement
of each such person to maintain the confidentiality of the information.
(a) Neither party shall disclose the terms and conditions of this Agreement
to any third-party, except as required by law, or by governmental regulations,
requirement or order, or as may be necessary to establish or assert its rights
hereunder, or unless mutually agreed upon by the parties. However, absent the
other party's consent, either party may disclose this Agreement's terms and
conditions to a third party on a need to know basis in connection with a
financing, merger or acquisition transaction.
(b) Notification. Each party shall promptly notify the other party in
writing concerning any knowledge that party possesses regarding any unauthorized
party's possession, use, or knowledge of any portion of the other party's
Confidential Information.
(c) Return of Confidential Information. Upon the disclosing party's
request, the receiving party shall promptly return the disclosing party's
confidential information. However, the receiving party need not return the
relevant confidential information if that party is expressly authorized to use
that Confidential Information under this Agreement, or if possession if
necessary for the receiving Party to perform its contractual obligations.
(d) The provisions of this paragraph shall survive the termination and
expiration of this Agreement.
13. Representations and Warranties. The Company represents and warrants to
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the Consultant as follows:
(a) This Agreement has been duly authorized, executed and delivered on
behalf of the Company, and is the valid and binding obligation of the Company.
Further, this Agreement is enforceable in accordance with its contractual terms,
subject only to the effect, if any, of bankruptcy laws or similar laws relating
to the insolvency of debtors and to principles of equity. However, the Company's
indemnification and/or contribution obligations under this Agreement may be
limited under Federal or applicable state securities laws.
(b) Regardless of lapse of time, the Company's execution delivery and
compliance with this Agreement and the Company's consummation of the
contemplated transactions shall not:(i) result in a material conflict with or
breach of any of the material terms or provisions of, or constitute a default
under, or result in the modification or termination of, or require consent
under, or result in the creation or imposition of any lien, security interest,
charge or encumbrance upon any of the material properties or assets of the
Company pursuant to the terms of, any agreement or instrument to which the
Company is a party or by which the Company may be bound or to which any of the
property or assets of the Company is subject, or (ii) violate the Company's
articles of incorporation or by-laws or (iii) have any material effect on any
material license, permit, judgment, decree, order, statute, rule or regulation
applicable to the Company or any of its properties or businesses.
14. Indemnification.
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(a) The Company's acts, statements and representations to third parties are
the sole responsibility of the Company. The Company agrees to indemnify the
Consultant and hold the Consultant harmless from any liabilities, claims, losses
and expenses, including legal costs and expenses incurred by the Consultant,
that result from acts, statements and representations made by the Company and
its authorized representatives to third parties. The Company represents that
all materials provided to the Consultant in relation to the contractual
consulting services are truthful and accurate, and that the Consultant may rely
upon these materials without independent verification of the facts or other
information.
(b) All acts, and oral/written statements and representations made by the
Consultant to third parties, absent the Company's approval and which are not
made in reliance upon information and/or material furnished to the Consultant by
the Company, are the sole responsibility of the Consultant. The Consultant
agrees to indemnify the Company for any liability, claims, losses and expenses,
including legal costs and expenses, incurred by the Company that result from the
Consultant's representations made absent the Company's approval.
(c) In the absence of the Consultant's gross negligence or willful
misconduct, the Consultant shall not be liable to the Company or to any officer,
director, employee, stockholder or creditor of the Company, for any act or
omission in the course of, or in connection with, the provision of advice or
assistance. Except in those cases where the gross negligence or misconduct of
the Consultant is alleged and proven in a court of competent jurisdiction, the
Company agrees to and shall defend, indemnify and hold the Consultant harmless
from and against any and all suits, claims, demands, causes of action,
judgments, damages, expenses and liability (including court costs and attorney's
fees paid in the defense of any specific action) which may in any way result
from any activities pursuant to or in any connection with this Agreement.
15. Taxes. Generally, all taxes, duties, and other governmental fees or
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charges arising from the Consultant's receipt of remuneration shall be borne by
the Consultant. The sole exception is any fees, costs and expenses, which the
Company is responsible for pursuant to Provision 5.
16. Notices. Any required or permitted notice shall be delivered to the
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other party at the address specified above. Notice shall be deemed
appropriately tendered under the following circumstances: (a) upon personal
delivery to a duly authorized representative; (b) upon confirmation of a
telephone facsimile; (c) upon confirmation of receipt of an electronic e-mail;
or (d) upon five (5) days passing after mailing a correspondence postage
pre-paid by certified or registered mail or overnight courier. Either party may
change its address by written notice in accordance with this provision.
17. Governing Law. This Agreement shall be governed by, construed and
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enforced in accordance with the laws of the State of Illinois. Any action or
proceeding in connection with this Agreement shall be brought in the Nineteenth
Judicial circuit, Lake County, Illinois, or in the United States District Court
for the Northern District of Illinois, the Company irrevocably consenting to the
jurisdictionThe prevailing party in any such proceeding shall be entitled to
recover its costs, including reasonably incurred attorneys' fees.
18. Attorneys' Fees. The Company shall reimburse the Consultant for any
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legal or other expenses reasonably incurred by the Consultant in connection with
investigating, preparing to defend or defending any lawsuits, claims, or other
proceedings arising in any manner out of or in the Consultant's enforcement of
the payment terms of this Agreement.
19. Assignment. This Agreement shall be binding upon and inure to the
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benefit of the detailed parties and their respective legal representatives,
successors, and assigns. Neither party shall make an assignment of this
Agreement without the prior written consent of the other Party. A party's
request for an assignment shall be in writing and sent to the other party's
above detailed address. The other party shall respond to the assignment request
within ten (10) business days. Any party's assignment absent the other party's
consent shall be null and void.
20. Execution in Counterparts. This Agreement may be executed in one or
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more counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the
date first written above.
CIRCLE GROUP INTERNET, INC. (Consultant)
/s/ Xxxxxxx X. Xxxxxxx
By:___________________________
Xxxxxxx X. Xxxxxxx, CEO
MATERIAL TECHNOLOGIES, INC. (Company)
/s/ Xxxxxx Xxxxxxxxx
By:___________________________
Xxxxxx Xxxxxxxxx, CEO
